ISLAMABAD: Japan has shown keen interest in joining Pakistan’s multibillion-dollar Reko Diq copper and gold mining venture, signaling a potential expansion of its investments beyond the country’s auto sector. Officials say Japan is looking to participate alongside local and international stakeholders in this flagship project.
Previously, Saudi Arabia had also expressed interest, including the possibility of acquiring a 15% stake. In a recent Economic Coordination Committee (ECC) briefing, the Finance Division confirmed Japan’s eagerness to invest and reassured that the proposed engagement would not result in capital flight. Two guarantees are part of the plan: a sovereign completion guarantee from the government and an Asian Development Bank (ADB) guarantee covering Balochistan Mineral Resource Limited’s (BMRL) equity.
The Petroleum Division informed the ECC that the project’s equity totals $900 million, with 50% funded by sponsors and the remaining 50% managed by agencies. State-owned enterprises (SOEs) are set to repatriate funds via Pakistan Minerals Private Limited (PMPL) over seven years to meet a $2,145 million funding commitment, either as equity or shareholder loans. The financing structure for the $3.5 billion project emphasizes health, safety, security, and community welfare, reflecting a commitment to responsible development.
During discussions, bank representatives highlighted the project’s financial significance and outlined details of the financial close, while the ECC recognized Reko Diq’s potential to transform Balochistan’s economic landscape and generate substantial benefits for Pakistan.
The Petroleum Division sought approval for the final terms and agreements, requesting authorization for SOEs to repatriate funds via PMPL over seven years or more, beginning January 2023. Foreign exchange requirements for the Japanese and local investment will initially be arranged by Oil and Gas Development Company (OGDC) and Pakistan Petroleum Ltd (PPL), with government support provided if needed. The division also requested ECC approval to allow BMRL to meet its $1,287 million funding commitment through equity or shareholder loans.
Finally, the Petroleum and Finance secretaries were asked to finalize the Government-Developer Agreement (GDA) and government guarantees, signing under Rule 7(2) of the Rules of Business, 1973, to formally advance Japan’s participation in Reko Diq.
